Daily Currency Update
GBP - British poundLast week was a busy end to the week for Sterling. On Thursday the Bank of England voted unanimously to keep rates on hold at 0.1%, however they did vote for an increase of £150bn of the bond purchasing program in a bid to boost the economy through the second wave of lockdowns across the UK. This will take the total amount of quantitative easing from £745bn to £895bn. Surprisingly this move by the Bank of England saw investors buy Sterling, with GBP/USD trading from mid 1.29s on Thursday morning to mid 1.31s by the end of the week. Looking ahead at this week, we have the Bank of England Governor Andrew Bailey speaking on Monday, Thursday and Friday. This should give us some good insights into their views on negative interests for the UK. We also have preliminary GDP data released on Thursday at 7.00am (GMT).
On Saturday Joe Biden was announced as the new president of the United States, replacing Donald Trump. His victory in Pennsylvania put him over the threshold of 270 Electoral College votes he needed to clinch the presidency, putting an end to four days of uncertainty. Donald Trump is yet to concede the election, stating that there needs to be a re-count in numerous states and threatening a series of lawsuits. The US dollar was generally sold off last week, and on Friday sunk to its lower level in a couple of months against a number of currencies. The prospect of a divided government and the effect this would have on the highly anticipated stimulus package all led to investors taking a dim view of the dollar.
- GBP/USD: 1.3105 - 1.3195 ▼
- GBP/AUD: 1.8005 - 1.8120 ▼
- EUR/USD: 1.1790 - 1.1910 ▼